Ingersoll-Rand Earnings Preview

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Ingersoll-Rand (NYS: IR) hasn't been able to establish an earnings trend, bouncing between beating and falling short of estimates during the past fiscal year. The company will unveil its latest earnings on Thursday. Ingersoll-Rand provides products and services to improve the quality and comfort of air in homes and buildings and transport and protect food and perishables.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on Ingersoll-Rand with nine of 17 analysts rating it hold. Analysts don't like Ingersoll-Rand as much as competitor Standex International overall. One out of one analysts rate Standex International a buy compared to eight of 17 for Ingersoll-Rand.
  • Revenue forecasts: On average, analysts predict $3.89 billion in revenue this quarter. That would represent a rise of 4.3% from the year-ago quarter.
  • Wall Street earnings expectations: The average analyst estimate is earnings of $0.78 per share. Estimates range from $0.76 to $0.80.

What our community says:
CAPS All-Stars are solidly behind the stock with 99.4% assigning it an outperform rating. The community at large backs the All-Stars with 97.3% giving it a rating of outperform. Fools are bullish on Ingersoll-Rand and haven't been shy with their opinions lately, logging 311 posts in the past 30 days. Ingersoll-Rand has a bullish CAPS rating of five out of five stars that is about on par with the Fool community assessment.

Management:
Revenue has now gone up for three straight quarters. The company boosted its gross margin by 2.1 percentage points in the last quarter. Revenue rose 5.1% while cost of sales rose 2% to $2.71 billion from a year earlier.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

30.4%

28.3%

27.2%

28.9%

Operating Margin

12.2%

7.4%

8.4%

10.9%

Net Margin

2.4%

(2.5%)

5.7%

6.2%

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At the time this article was published

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